Comovements in Corporate Waves

Stock price synchronicity and public firm-specificinformation

“…Colak and Tekatli (2010) find that stock market returns are likely to be the common factor that drives major corporate events. Thus, it is possible that major information events such as voluntary disclosures also are driven by market returns.…”

“…10 For example, major corporate events such as divestitures, initial public offerings, mergers and acquisitions, stock repurchases, and seasoned-equity offerings are known to occur in waves (Colak and Tekatli, 2010). Thus, there could be a common factor that affects the information-providing behavior (e.g., voluntary disclosures) of some or all firms.…”

Decoupling by clienteles and by time in the financial markets: The case of two-stage stock-financed mergers

“…We add that conducting an optimal two-stage M&A deal is not only desirable, but also plausible. The findings of Colak and Tekatli (2013) indicate that, typically, the aggregate equity issuance (IPO or SEO) cycles lead the aggregate M&A wave by a few months/quarters. Thus, the general lead-lag empirical relationship between the equity issuances and the M&A waves is suitable for implementing a two-stage M&A strategy.…”

“…We start from 1985 because SDC does not provide complete uses of proceeds prior to 1985. Each deal in the sample satisfies the following requirements: (1) the transaction is completed and categorized by the SDC as a majority M&A transaction; (2) both parties in the transaction are independent corporations; 7 (3) acquirer and target are both U.S. companies; (4) acquirer must be listed on the NYSE, AMEX, or NASDAQ, and must exist in the CRSP database; (5) in order to control for the means of payment, only simple stock mergers, simple cash mergers, and stock-financed cash mergers that offered IPOs/SEOs in the 12 months preceding their announcement dates are included in the sample; (6) in order to estimate systematic risk, the trading days for an acquirer are at least 70 days prior to 6 Using a similar VAR analysis and similar definitions of quarterly IPO/SEO/M&A waves as in Colak and Tekatli (2013), we verified that for the 8 out of 10 of the 1-digit SIC industries, for the quarters between 1985/1 through 2007/4, equity waves (either the IPO or the SEO waves) lead the M&A wave by about two quarters (results are available through the authors).…”